A decent income for a decent life - ANRSP position on Minimum Living Wages

In a context of persisting dependency on the informal economy for large numbers of people, worsening loss of livelihood because of limited access to the resources (land grabbing, pollution…) and growing precariousness in the formal economy because of increasing non-standard forms of work (short term contracts, on call work, zero-hour contracts, platform etc.), one could be tempted to forget about the level of income or wages. After all, ‘any job is better than no job at all’. And yet, it is precisely in this context we have to guard and guarantee the right of every person to have the necessary resources and income to lead a life in dignity.

We are aware of the important links between the remuneration of ones work, social protection allowances, access to quality social services like health. Low income, bad housing or limited healthy food leads to illness and health expenses and the incapacity to work and to earn an income and vice-versa. In this position paper we will however focus on the revenue one earns for work. The right to a Minimum Living Wage has been recognized in several international conventions and declarations, like the Constitution of the ILO (1919), the Universal Declaration on Human Rights (UDHR 1948), and the International Covenant on Economic, Social and Cultural Rights (ICESC 1966) and ILO convention 131 (1970).

As members of the ANRSP, we adhere to these international conventions and declarations and we consider a Minimum Living Wage to be a legally binding concept. It is a right that has to be respected whatever the situation, the form or statute of labor, without any discrimination. However, we have to acknowledge the international texts remain broad and are in need of specification. So far there is no globally accepted definition and methodology to calculate living wages. Enterprises often use this as justification for not paying a living wage and refer only to minimum wages set by national laws as legally binding concepts.

In reality, the current minimum wages are not sufficient to guarantee the needs for workers and their families and don’t allow to lead a life in dignity. They are also greatly insufficient to stop the current race to the bottom, fueled by global competition and businesses desire to maximize profits. The ILO constitution and the UDHR not only mention a ‘minimum living wage’, but also a just share of the fruits of progress to all and a ’just remuneration’. In addition to this, sustainable Development Goal 10 focuses entirely on the reduction of inequality. Apart from just taxation and redistributive social protection, a sufficiently high share of labor in the overall wealth is a key to achieving this objective.

Thanks to high economic growth rates in several low and middle income countries, income inequality between countries has recently started to decline.  Asia has been a key in reducing income inequality between countries. The rapid structural transformation from the agricultural to the non-agricultural sectors, with large and still-growing manufacturing and other export oriented sectors, has led to strong economic growth in most Asian countries. This shifted the world’s economic center of gravity to Asia. Unfortunately, income inequality within the vast majority of countries, also in Asia, is increasing and income inequality between households across the world has remained systematically high for several decades.

The ILO Global Wage Report 2017 shows that wages and salaries constitute the largest single source of income for households in most countries.  But it also shows a growing gap between wages and productivity and a shrinking share of labor in the overall economy. This can also be seen in Asia. After several years of relatively strong wage growth, recently this trend has slowed or reversed. The wage growth has lagged behind the growth of labor productivity, leading to a fall in labor share of GDP, partly because of technological change, globalization, and weakening of workers’ bargaining power. Global supply chains, where activities are being outsourced to subcontractors, with more precarious types of work, have caused polarization and clustering of high-skilled workers in some enterprises in the chain and low-skilled workers in others.  Inequality also increased within enterprises, since the vast majority of workers are paid less than the average wages in the enterprise, while few workers at the top end are being paid very high wages.

For the members of the ANRSP it is clear that there is a large gap between the actual remuneration the majority of people receive for their work and what is needed to fulfill the right to a life in dignity and a just share of global wealth for all.

At the moment different initiatives and campaigns are trying to define, measure and even implement the Minimum Living Wage. These initiatives are mostly focused on Asia and on formal employment. It is a good thing several segments of civil society, trade unions, NGO’s, academic institutions, employers’ organizations and multinational enterprises are trying to define a benchmark for a Minimum Living Wage. Broader agreement on what a living wage should cover could limit the current downward push on wages and labor circumstances because of global competition. However, there are a lot of differences between all these initiatives. Those differences, among others, are; the costs estimation of basic needs acceptable by society, costs of living in different locations and type of expenditure. Some initiatives use very crude estimations of the cost of living, while others are very meticulous. Not only that, the approaches are also different, some initiatives are working together with other stakeholders, while other initiatives are not. The other difficulty is that the data required to estimating living costs are not always available.

Unfortunately some initiatives try to divert attention away from the basic issue, the right of every worker to lead a life in dignity and the level of income required therefore. They put the burden of a sufficiently high wage on the shoulders of the workers, by claiming low pay is mainly caused by low labor productivity. For the members of the ANRSP a presumed lack of productivity can never be used as an excuse to violate people’s basic rights.

ANRSP demands a Minimum Living Wage 
In different situations different terms are being used when talking about the income necessary for a certain minimum standard of life. In the case of self-employment or (subsistence) farming, it can be translated into sufficient access to the necessary resources (like land) and a sufficiently high remuneration for the goods or services one can produce during a normal working time. Guaranteeing this requires specific policies.

A Minimum Living Wage should allow workers and their families to afford a life in dignity.

• Minimum living wages are taking into account the needs of workers and their families. It is not a wage for an individuals’ needs only and is based on realistic assumptions of the family size and the number of wage earners per family in low‐income/ low‐educated groups.
• It should be guaranteed to all workers, including women, youth and migrant workers, regardless of their contractual arrangements, without any discrimination. 
• There needs to be a common understanding on the “needs of workers and their families”. A Minimum Living Wage should at least cover the following items:  food,  housing, transportation, clothing, medical expenses, education expenses, household bills, utilities and recreation, essential care costs, contingency for emergencies
• Minimum living wages should serve as a floor, allowing workers to bargain for higher levels, for instance when labor productivity rises or to achieve a just distribution of income in society. 
• Living wage should be considered as take-home pay during normal working hours , after mandatory deductions such as taxes. Earning the minimum living wage level may never depend on working overtime.
• Adequate, universal social protection floors should be part of the package.
• It should be rooted in strong ownership in the labor movement. This means it requires systematic involvement of representative trade union bodies.
• It should be regularly reviewed and updated to be able to keep up with the increasing cost of living, to adjust to inflation. This should be done at least yearly.
• It must be based on good quality evidence (calculations/costing), preventing possible bias towards current low living standards.
• Complexity should be kept to a minimum:  it should have a transparent and publicly available methodology and publicly available benchmarks.
• Effective enforcement is needed, including well-resourced labor inspectorates and dissuasive penalties and sanctions.
• In case of self-employment, farming, fishing or activities in the informal economy, the relevant representative organizations, currently not taking part in traditional wage bargaining, must be strongly involved in designing the policy on price setting, access to land and resources.

What steps to take?

1. We call on all sectors of civil society: trade unions, farmers, fisher folk, self-employed and organizations of groups in the informal economy, to unite and align their respective efforts for a just, living wage.  We need to take effort to reach consensus on defining and measuring living wage, where subjectivity should not be an obstacle to accept and use Living wage. 
2. We call on the academic institutions behind initiatives trying to establish benchmarks for a Minimum Living Wage to work closely together with the relevant and representative organizations of all sectors in civil society. This way, the justified demands of low income earning groups in society can be matched with the available resources to provide the much needed evidence and costing calculations.
3. We call on all governments to ratify ILO convention 131 on minimum wage fixing. 
4. We ask to bring these demands to the international policy level.

• Minimum Living Wages should be brought to the relevant continental and regional policy bodies like ASEAN, SAARC, ASEM and EU.
• We call on our governments, on our representatives in the ILO and on the ILO secretariat to (re)open the discussion in the ILO on Minimum Living Wages. A global, tripartite agreement to specify what a Minimum Living Wage should cover and how it should be calculated, would provide national wage bargaining with a much needed standard. We believe it is possible to find agreement on a methodology that is transparent, accurate and convincing all stakeholders.
• Trade union members of the ANRSP work together with the global unions to conclude enforceable brand agreements on wages. Ultimately it should be possible to conclude Global Sectoral agreements, to eradicate the harmful competition between countries and regions at the expense of the workers.
• Build or reinforce initiatives in social economy (cooperatives or other forms) to guarantee access to much needed resources, increase the income for the rural poor and fisher folk and strengthen the position of people in the informal economy by supporting their initiatives to unite.